Playing oil stocks Earnings could fall dramatically if rising prices lead to reduced demand -- here's a way to cope. (Full story) Prices, where to from here? • Soaring oil prices a thing of the past? Maybe, but don't expect a plunge. • Oil bubble set to burst? For more oil features • Is OPEC becoming irrelevant? • Alternative energy stocks -- a good bet? • Where's all that oil money going?

NEW YORK (CNN/Money) - The head of the Federal Trade Commission said the omission of a federal price-gouging law is a sound policy that Congress should not be quick to reverse, while state attorneys-general pushed for more consumer protection against price spikes during a Senate hearing Wednesday.

During the hearing, FTC Chair Deborah Majoras said higher prices provide an incentive for suppliers to send more supply into the market during times of shortage.

Arizona Attorney General Terry Goddard, whose state does not have a price-gouging statute, said gasoline retailer profits tripled from 10 cents a gallon to more than 30 cents a gallon in his state in the weeks after Katrina. He said buffers are needed to protect consumers from sudden spikes in prices during emergency situations.

Gas prices have surged 20 percent this year, and while several states have price-gouging laws, calls have been made for a federal statute in the aftermath of Hurricane Katrina.

Earlier Wednesday, the CEOs from Exxon Mobil and Chevron rejected claims that they had been involved in price gouging. Exxon Mobil CEO Lee Raymond said the company's pricing policy after Katrina was "to minimize the increase in price while at the same time recognizing that if we kept the price too low, we would quickly run out of gasoline and have shortages."

South Carolina Attorney General Henry McMaster said his office is currently investigating seven gas stations in his state that charged as much as $4.79 a gallon following the hurricanes. He pushed for a law that would allow attorneys general to bring criminal charges against price gougers during a state of emergency.

Majoras said price controls might be attractive in the short-term, but are likely to hurt consumers in the long run. She said higher prices encourage consumers to decrease demand and help curtail panic buying.

--------------------

Big oil is under fire -- click here.

Think you're getting gouged? Click here to see what you can do about it.